Cents Plan Formula – How to Budget

There are many thoughts on how to spend your money, how much to save, what qualifies as a mandatory vs. discretionary expenses…the list can go on and on.  That is why the Cents Plan Formula is simple, easy, and flexible. Ultimately, you decide Where Cents Parallel Vision.

The Cents Plan Formula is made up of 5 categories: Save, Basic Expenses, Give, Fun Spending, and Debt.

The Cents Plan is the first step in the Money Bliss Steps for Financial Freedom. Let’s breakdown each section of the Cents Plan Formula:


Save is listed first for a reason. To save, pay yourself first. Set aside a certain percentage every month. Store up money to be spent at a future time. Learn more on How to Save Money with these simple and easy tips.

Recommended Save Percentage – 20%

Types of items to save for: emergency fund, rainy day fund, long-term savings (3-6 months of expenses), or retirement savings. Save for goal-oriented items, such as: car, wedding, vacation, college, baby, home improvement, or name your own vision.

Basic Expenses

The basic expenses in our life. Some people call it mandatory expenses. Either way, it is the basic needs we need to survive – shelter, food, clothing, and a mode of transportation. Basic expenses – bare necessity. Examples of Basic Expenses: Mortgage / Rent, utilities, gas, clothing, medical co-pays, insurance, groceries, auto repair, child care, etc.

Recommended Basic Expenses Percentage – 50% 

The goal with basic expenses is to stay under 50% of take home pay. Then, cash is freed up to be used in another categories. These expenses DO NOT qualify as Basic Expenses: Starbucks, cable bill, eating out, housecleaner, hair salon, home improvement, gifts, dry cleaning, etc.


Giving is generous. It is a random act of kindness. Decide where and when you want to give your money. There is a joy behind giving! And remember, you might as well give some now because you can’t bury your money later.

Recommended Give Percentage – 10% 

Giving happens in many ways…with your time, your money, or your talents. It is your choice on how you choose to give and how much to give. Give money is set aside for random acts of kindness or planned giving.

Fun Spending

Fun spending (AKA discretionary spending) is exactly what it is labeled – fun spending! This is the space in our life that feeds our hearts. It is why we work hard to have fun spending money in our lives. Spend your money where your heart desires. Examples of Fun Spending: entertainment, eating out, memberships, kid activities, gifts, date nights, anything FUN! And my personal favorite…Slush money – spending money you can spend anyway you want without any questions.

Recommended Fun Spending Percentage – 20% 

Fun spending is when you live life to the fullest. Plus the best part, once you have eliminated debt, lowered your basic expenses, then increase the fun spending percentage in your Cents Plan.


Yes, debt is part of the Cents Plan Formula. The goal is ZERO debt. Debt is the cash flow killer in your budget. With debt, it is impossible to do many of the above categories.  Most debt (outside of a mortgage) is just overspending on items that we could not afford in the first place.

Recommended Debt Percentage – 0% 

Don’t fret…it is possible to get out of debt! It takes a dedicated plan. Check out this post on How to Pay Off Debt. The key to stay out of debt is to save in advance! Up your saving percentage for that big purchase and pay cash.

Cents Plan Formula. How to budget. Printable. Monthly basis. How to budget your money.

The Cents Plan Formula is developed to be flexible. Allowing for changes as you go through various seasons in your life. With savings, you are prepared for the unexpected or able to pay cash instead of going into to debt. By minimizing your basic expenses, there is money in the Cents Plan to go towards another category of your choice. With giving, you are able to help others and provide a smile. Fun spending is where you live your life – filling your heart with memories. The last category is debt; in the Cents Plan Formula, it serves as a reminder of the slippery slope debt can cause in life.

All in all, money is a part of our daily lives. We have to get to a point where we control our money and not be controlled by money.  With the Cents Plan Formula, it is simple and easy to formulate the spending of money.

Now, take what you learned about the Cents Plan Formula and turn it into the Cents Plan.

Cents Plan. Money Coach. Budget. Save Money. Get out of Debt. Personal Finance.

This is YOUR Cents Plan. Not a budget.  You decide where you want to spend your money.

Enjoy Freedom with the Cents Plan.  A budget is too constricting. Learn to enjoy your life with money. Get out of debt. Save money.  Live life.

Get your Cents Plan now.

The Money Bliss Steps to Financial Freedom will guide you enjoy money and your life. The first step of the Money Bliss step is to get your financial house in order. Completing your Cents Plan is the part of the first step to financial freedom.
Money Bliss Steps to Financial Freedom. Life debt free. Simple steps for life. Money saving tips. Alternative to Dave Ramsey baby steps or Tony Robbins or Suze Orman. Personal Finance. Money Bliss Checklist. Printable. Budget.

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